Today's Top Supply Chain and Logistics News From WSJ
May 24 2017 - 6:22AM
Dow Jones News
By Brian Baskin
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It's China and Russia vs. Airbus SE and Boeing Co. in a fight to
control the passenger jet market. The two countries are teaming up
to take on the duopoly that dominates passenger aircraft
production, the WSJ's Trefor Moss reports. The partnership is a
sign of how jet production remains one of the most difficult
sectors to break into, where Airbus and Boeing use enormous
technical advantages in areas such as fuel efficiency to hold onto
customers. China and Russia can marshal massive state resources to
muscle their way in, with plans to build a 280-seat long-haul plane
that would start flying toward the end of the next decade. The two
countries have long been geopolitical rivals, but increasingly team
up in the business arena, particularly in areas where they both lag
European and American rivals. Widebody jets would be a particularly
big prize, with Airbus estimating the market to be worth over $2
trillion over the next two decades.
Western companies operating in China will need to get used to
having the government looking over their shoulder. Foreign firms
will be a part of the Social Credit System, a state initiative that
will use data collection and analysis to enforce norms in
everything from factory emissions to worker safety, the WSJ's
Andrew Browne writes in his "China's World" column. The program,
which is expected to ramp up by 2020, is one of many ways China is
attempting to exert greater control over how foreign manufacturers
operate within its borders. It's a trend that rarely works out to
the benefit of Western firms. Technology suppliers are being shut
out of infrastructure projects in the name national security, and a
"Made in China 2025" campaign would have Chinese technologies play
a growing role in robotics and semiconductors. With the Social
Credit System, companies would need to maintain ratings akin to
credit scores, and would face taxes and other penalties for running
afoul of a formula that is far from transparent, raising fears of
antiforeign bias.
A proposed merger of two trading houses could place an enormous
amount of the world's commodities under one roof. Glencore PLC has
approached grain trader Bunge Ltd. about a takeover, in deal that
would easily clear $10 billion and give the Swiss mining giant the
major U.S. presence it has long sought. A tie-up would also help
unlock the "frozen" grain market, where a glut of staple crops has
farmers unwilling to sell at rock-bottom prices, and food
processors won't buy in advance because they expect prices to stay
low, the WSJ's Dana Mattioli, Jacob Bunge and Scott Patterson
write. Consolidation would give the remaining players in the grain
market more control over supply, potentially resulting in fewer and
shorter gluts, and comes as other blockbuster mergers are being
pursued in other corners of the agriculture sector, including
pesticides and genetically engineered seeds. The status of talks is
unknown, and a deal is far from certain. But the fact that
Glencore, once thought by many analysts and investors to be close
to insolvency, is in a position to make such an offer is a sign
that the company has weathered the commodities rout.
POLITICS
The border tax is stuck in customs. Political prospects for
border adjustment, where imports would be taxed and exports
exempted, are fading amid opposition from corporations, antitax
conservatives and Senate Republicans, the WSJ's Richard Rubin
reports. Proponents say the tax will encourage more companies to
make more goods in the U.S., but the proposal could harshly
penalize companies like Target Corp. that rely on cheap imports
from Asia and Latin America to keep prices low. Retailers appear to
be winning the political fight, with border adjustment potentially
failing even to make it out of the Ways and Means Committee. The
provision's fate has implications beyond the border, as revenue
generated by the tax is needed to pay for proposed cuts to the
corporate tax rate.
QUOTABLE
IN OTHER NEWS
Brazilian meatpacker JBS's shares fell and the company could
sell some assets amid insider-trading accusations. (WSJ)
The U.S. is preparing to sue Fiat Chrysler Automobiles NV for
allegedly cheating on government emissions tests. (WSJ)
Uber Technologies Inc. said it underpaid New York City drivers
for more than two years. (WSJ)
The U.S. labor market still has room for improvement despite low
unemployment, the Federal Reserve's Lael Brainard said. (WSJ)
Eurozone manufacturing added jobs at the fastest pace in 20
years. (WSJ)
Sears Holdings Corp. reached an agreement to extend the
maturities for some of its debt. (WSJ)
Bond ratings companies are downgrading mall-backed debt as
stores close. (WSJ)
Shipping lines and large shippers will need to join forces to
optimize increasingly complex supply chains, a professor writes.
(Splash 24/7)
Unionized pilots plan to picket Amazon.com Inc.'s annual
meeting, protesting the wages paid by the retailer's cargo air
service. (Quartz)
A union leader raised concerns about the cost of renting chassis
at the Port of New York and New Jersey. (American Shipper)
Leased demand for industrial property lagged construction for
the first time since 2010, CBRE said. (DC Velocity)
U.S. truck tonnage fell 1.8% in April compared with a year
earlier. (Transport Topics)
Shares of Cosco Shipping Holdings remain halted amid rumors the
company is planning a takeover bid for a rival. (Lloyd's List)
CMA CGM will introduce a $150 cancellation fee for shippers that
fail to show up at certain ports in the Middle East and India.
(Seatrade-Maritime)
Six state attorneys general are asking federal regulators to
strengthen rules on trains transporting crude oil. (The Hill)
Fast-fashion leaders Inditex SA's Zara and Hennes & Mauritz
are being challenged by even speedier online-only rivals.
(RetailDIVE)
ABOUT US
Brian Baskin is editor of WSJ Logistics Report. Follow him at
@brianjbaskin, and follow the entire WSJ Logistics Report team:
@PaulPage, @jensmithWSJ and @EEPhillips_WSJ and follow the WSJ
Logistics Report on Twitter at @WSJLogistics.
Write to Brian Baskin at brian.baskin@wsj.com
(END) Dow Jones Newswires
May 24, 2017 07:07 ET (11:07 GMT)
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